Washington Banking (NASDAQ: WBCO) and Pinnacle Financial Partners (NASDAQ:PNFP) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Profitability

This table compares Washington Banking and Pinnacle Financial Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Washington Banking N/A N/A N/A
Pinnacle Financial Partners 27.36% 7.67% 1.16%

Institutional & Insider Ownership

77.8% of Pinnacle Financial Partners shares are owned by institutional investors. 5.4% of Pinnacle Financial Partners shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Pinnacle Financial Partners pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Washington Banking does not pay a dividend. Pinnacle Financial Partners pays out 18.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings for Washington Banking and Pinnacle Financial Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Banking 0 0 0 0 N/A
Pinnacle Financial Partners 0 2 2 0 2.50

Pinnacle Financial Partners has a consensus target price of $64.25, indicating a potential upside of 3.88%. Given Pinnacle Financial Partners’ higher probable upside, analysts plainly believe Pinnacle Financial Partners is more favorable than Washington Banking.

Earnings & Valuation

This table compares Washington Banking and Pinnacle Financial Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Washington Banking N/A N/A N/A N/A N/A
Pinnacle Financial Partners $479.70 million 10.01 $241.48 million $3.11 19.89

Pinnacle Financial Partners has higher revenue and earnings than Washington Banking.

Summary

Pinnacle Financial Partners beats Washington Banking on 9 of the 10 factors compared between the two stocks.

About Washington Banking

Washington Banking Company is a bank holding company. The Company’s primary business is conducted by its wholly owned subsidiary, Whidbey Island Bank (the Bank). The business of the Bank, which is focused in the northern area of Western Washington, consists primarily of attracting deposits from the general public and originating loans. Whidbey Island Bank conducts a full-service, community, commercial banking business. The Bank also offers nondeposit managed investment products and services, which are not Federal Deposit Insurance Corporation (FDIC) insured. These programs are provided through the investment advisory companies Elliott Cove Capital Management LLC and DFC Services & DFC Insurance Services. Another nondeposit product offered through the Bank, which is not FDIC insured, is a sweep investment option available through a brokerage account.

About Pinnacle Financial Partners

Pinnacle Financial Partners, Inc. is a bank holding company. The Company operates through its subsidiary, Pinnacle Bank. The Company operates as a community bank primarily in the urban markets of Nashville, Knoxville, Memphis and Chattanooga, Tennessee and other counties. It provides the personalized service associated with small community banks, while seeking to offer the products and services, such as investments and treasury management. Pinnacle Bank offers an array of convenience-centered products and services, including round the clock telephone and Internet banking, mobile banking, debit and credit cards, direct deposit, remote deposit and cash management services for small- to medium-sized businesses. In addition, Pinnacle Bank is associated with a network of automated teller machines of other financial institutions that its clients are able to use throughout Tennessee and other regions.

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